Kevin Trudeau's Sordid Regulatory History

Stephen Barrett, M.D.

Kevin Trudeau has been in trouble for misleading advertising many times. In 1998, he settled FTC charges that six infomercials in which he appeared were misleading. He agreed to pay $500,000 in consumer redress and establish a $500,000 escrow account or bond to assure future compliance with the law. However, he continued to produce and participate in misleading infomercials and portrayed himself as a victim of government harassment.

In 2004, Trudeau signed a consent agreement under which he agreed to pay a $2 million penalty and be banned from appearing in, producing, or disseminating future infomercials that advertise any type of product, service, or program to the public, except for truthful infomercials for books, newsletters, and other informational publications. In addition, he was prohibited from making health claims for any type of product, service, or program in any form of advertising. The settlement also covered his companies: Shop America (USA), LLC, Shop America Marketing Group, LLC, and Trustar Global Media, Limited. An FTC official stated that the ban was "meant to shut down an infomercial empire that has misled American consumers for years."

In February 2005, Trudeau sued the FTC, claiming that its news release about the settlement was misleading and had injured his business. The FTC replied that its news release was accurate, that news releases about agency actions are not subject to judicial review, and that court acceptance of such cases might flood the court with similar cases and wreak havoc on the ability of federal agencies to communicate with the public. In August 2005, the judge agreed with the FTC and dismissed Trudeau's suit.

Meanwhile, Trudeau took full advantage of his freedom to market publications and began using infomercials to promote a self-published book called Natural Cures 'They' Don't Want You to Know About. The infomercials claimed that the book was filled with information about cures that government agencies and drug companies don't want the public to find out about. Although this description is false, his approach resonated with enough people to drive it to the top of the New York Times bestseller list and trigger a flood of news reports about its commercial success. In 2005, the New York State Consumer Protection Board warned that the infomercials were misleading and said it would ask television stations to stop running them. Trudeau responded with a lawsuit.

In 2006, Trudeau began using infomercials to market The Weight-Loss Cure "They" Don't Want Your to Know About. The supposed "cure" was centered around the use of injections of human chorionic gonadotropin (HCG). However, scientific studies demonstrated that HCG injections didn't cause weight loss and regulatory actions by the FTC and FDA have curbed their use in the United States. In 2007, the FTC charged Trudeau with violating the 2004 consent agreement by misrepresenting the contents of the book and asked the Illinois Federal Court to hold him in civil contempt. The court did so, banned him for three years from involvement in any infomercials for publications in which he has a financial interest, and ordered him to disgorge $5,173,000, which the judge described as conservative estimate of the royalties Trudeau realized from sale of the realized from the sale of the book through the infomercials. Three months later, the judge issued a supplemental order that raised the amount to $37,616,161, which he said was a reasonable approximation of the loss
consumers suffered as a result of Trudeau’s deceptive infomercials. In 2009, the U.S. Court of Appeals upheld the contempt ruling but ordered the trial judge (Robert W. Gettleman) to reevaluate the penalties. In 2010, Gettleman reissued the $37, 616,161 sanction and ordered Trudeau to post a $2 million bond if he wanted to resume doing business. He also also asked the U.S. Attorney's Office to prosecute Trudeau for criminal contempt.

In 2012, the FTC notified the court that Trudeau had refused to pay.

Trudeau has violated the Court's Order by failing to pay even one penny, and his claim of poverty is meritless. He is engaged in multiple lucrative business ventures that generate millions of dollars in revenues. He has systematically concealed substantial assets by various means, and dissipated other assets on his lavish lifestyle. Moreover, Trudeau's complete failure to pay, his extensive history of failing to obey court orders, and his total lack of credibility, demonstrate that he will not comply with the Court's Order unless he is coerced to do so by incarceration. Accordingly, the FTC moves to: (1) hold Trudeau in contempt for failing to pay the $37,616,161 contempt sanction; (2) immediately incarcerate him to coerce his compliance; and (3) order that he remain incarcerated until he purges his contempt by paying the sanction in full, with interest, and failing that, until he fully accounts for and turns over all assets directly or indirectly held by him or for his benefit.

The FTC's filing stated that Trudeau owned or controlled five corporations with nearly $190 million total cash flow Since 2007. In 2013, ABC News reported that he had been averaging about $1 million a year in new credit card charges that were paid mainly by the corporations the government says he controlled. Trudeau's attorneys denied this and characterized the payments as business expenses associated with Trudeau’s speaking engagements and worldwide travel. They claimed that the expenses were paid by separate companies that Trudeau neither owned nor controlled, in connection with services he provides to them. In 2013, during a court hearing, when an FTC attorney questioned him for more than three hours, Trudeau invoked his Fifth Amendment rights hundreds of times. Trudeau was represented by the Law Offices of Marc J. Lane, which specializes in "asset protection." The FTC also asked the court to hold the law firm and and three of the companies in contempt for failing to produce subpoenaed documents.

In 2013, Trudeau underwent a jury trial for criminal contempt and was found guilty. In 2014, he was sentenced to ten years in prison. At the sentencing hearing, the judge (Ronald Guzman) called him "deceitful to the core" and said he had "treated federal court orders as if they were mere suggestions . . . or at most impediments to be sidestepped, outmaneuvered, or just ignored."